CME Stock – CME Group, Inc. Trading Journal with VantagePoint
VantagePoint Trading Software is a forecasting tool that uses both end of day data and Artificial Intelligence to provide traders a forecast of market movement. These forecasts are 1-3 days in advance and help traders improve their timing on making trades and maximizing profit potential. The Artificial Intelligence software forecasts market movement for stocks, futures, Forex, ETFs, and Cryptocurrencies. CME Group, CME Stock is in focus today…
This journal entry looks at the recent market movements of CME Group: CME Stock
VantagePoint Trading Journal CME Stock
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*Source: Seeking Alpha
Let’s consider CME Group (Ticker: CME).
The VantagePoint platform recently indicated upside momentum.
Using the predictive indicators embedded within the VantagePoint platform and its predictive AI technology, we will point out three significant things. We have a bullish crossover indicated by the blue predictive indicator line crossing above the black simple moving average on December 10th. We can combine that with the VantagePoint propriety neural index indicator moving from the RED to the GREEN position on the same day. This indicator measures strength and weakness for a 48-hour period, in this case, strength. The move to the GREEN position further makes the case for a potentially bullish scenario. We also have the predicted high and low above yesterday’s actual high and low indicating further strength. I want to play the VP bullish indication.
If you are strictly a stock trader, simply buying CME in the $190.50 area is a prudent move. You are anticipating a move to the upside. It is always a good idea to enter a sell-stop order. This helps to mitigate potential losses. Placing that sell-stop in the $189.00 area will achieve that goal.
For active traders with a shorter investment time horizon, you can consider a setup utilizing options. Given the market conditions outlined above, taking an active, premium debit approach may be the best path to success.
Because of the reasons, the purchase of a debit call spread may be one way to approach this situation. First, you want to identify your target strike. To do this, you need three pieces of information. The current underlying price, the date of the options expiration that you want to use and the implied volatility for that expiration. For CME that yields a target strike of approximately $199. You can consider purchasing the December 28th weekly expiration 197.5/200 call spread for $0.35. The most you risk is the premium you pay and the most you can gain is the width of the spread less any premium paid. Max risk = $0.35, max reward = $2.20. If we base our max reward on the targeted strike of 199, this provides you with a reward to risk ratio of 3.43:1
Given the trading and market environment outlined above, a trader must evaluate whether this reward/risk ratio is appropriate for his/her risk tolerance.
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